INFLATION in Zimbabwe has reached such proportions that it destroyed the value of a new national currency before a single one of its banknotes had been spent. The largest note, $Z1000 ($A5), buys just one tomato.

The world’s highest inflation rate, which rose to a record 1594 per cent on Monday, rendered the new money worthless before it could be distributed. Mounds of banknotes - all paid for in scarce hard currency - are lying unused in warehouses.

The regime of the President, Robert Mugabe, ordered the new money in 2004. At that time, inflation was a relatively modest 400 per cent and Mr Mugabe was anxious to avoid the impression of economic chaos.

The information minister at the time, Jonathan Moyo, disclosed that Mr Mugabe had personally insisted that a banknote of $Z1000 could be the highest denomination of the new currency.

“In early 2004 Mugabe thought that inflation had been conquered and he refused to allow notes of a value higher,” Mr Moyo said. Yet by the time the new currency had been designed, printed and delivered, the $Z1000 banknote had a purchasing power of about 23 cents. Today, it would be just enough to buy a box of matches.

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